UK Accounting Glossary
One company exercises significant influence over another, falling short of complete control.
In accounting and business valuation an associate company (also known as an associate or associated company) is a company in which another company owns a significant portion of voting shares, usually between 20 – 50%. In this case, an owner does not consolidate the associate’s financial statements.
One should be concerned with how the associated company is to be treated in the parent’s consolidated financial statements.
Jones Textiles Ltd. and its associated company Highgrade Fashion were subject to tax advantages as a result of the new regulations.
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This glossary post was last updated: 23rd December 2018.